Reversal alert! EUR/AUD could be headed back north now that a double bottom has formed on its 1-hour forex chart, with price slowly inching higher toward the forex chart pattern’s neckline. The pattern is around 160 pips tall, so if the pair does break through the neckline at 1.4900, then we can expect the volatility of the up-move to be around that figure too. Stochastic is already pointing down, though, suggesting that dollar bulls may be beginning to lose steam, which threatens to invalidate the pattern.
All good things come to an end, and that seems to be the case for the ascending channel that GBP/AUD has been respecting on its 1-hour forex time frame since the first of week of May. Oh, memories! We certainly milked this ascending channel again, and again, and yet again. But now that the pair has broken down and out of the channel, it immediately formed what could potentially be a descending channel setup. Is this the start of a new trading relationship? In any case, price bounced off the bottom of the channel a couple of hours ago and is making its way back up. The most likely resistance area would probably be at the 2.1100 major psychological level since it has seen significant market interest in the past. Our indicators are looking good too since stochastic is already in overbought territory and the moving averages have crossed over into downtrend mode, with the 100 SMA potentially acting as dynamic resistance.
This here is a plain vanilla ascending triangle pattern. Since it’s an ascending triangle and the stochastic oscillator is currently in oversold territory, our directional bias is therefore to the upside. The moving averages are also moving farther apart, indicating that the uptrend is rather healthy, and the 100 SMA is acting as dynamic support to boot. But like all triangle forex chart patterns, there is also a possibility that price will break out to the downside, so make preparations for such a scenario too.
In any case, make sure to practice proper risk management should you find a trade based on any of these charts.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.AUD/CAD 1-hour Forex Chart